Embracer Group to close multiple studios, and cancel several unannounced projects

by Danny Craig  · 
Embracer Group to close multiple studios, and cancel several unannounced projects
Embracer Group

Embracer Group, the Swedish parent company of many major developers and publishers such as Crystal Dynamics and Plaion, has announced that it will be restructuring following a "challenging year" and the cancellation of a $2 billion partnership.

The details:

  • In a new open letter, Embracer CEO Lars Wingefors announced the restructuring program, revealing that it will be carried out in stages with the goal of completion by March 2024. The program is centered on "cost savings, capital allocation, efficiency, and consolidation," with the ultimate goal of transforming the company into a "highly cash-flow-generative business.”
  • The restructuring will result in a revamped investment review process, including the approval of game projects, with some unannounced projects being canned if it is anticipated that they will not be "worth it" to continue development. It will also cut back on third-party publishing to focus on internally developed IPs and increase "external funding of large-budget games." Any projects that Embracer has already announced will continue as usual.
  • Along with the cancellations, Wingefors confirmed that several studios would close to reduce operating and overhead costs even further, though he did not provide any details. Of course, the closure of studios will result in more job cuts, and Embracer's CEO stated that the company will "work to ensure that affected team members receive information first" and will try to provide opportunities elsewhere in the company to those affected wherever possible. Despite the planned layoffs in some areas, he stated that the company would keep hiring in others.
  • Embracer's net sales for the previous fiscal year totaled approximately $3.5 billion, representing a 121% increase over the previous year. Wingefors, on the other hand, referred to the period as a "challenging year" in the financial report due to several delays, lower demand for titles, and a "lackluster reception for certain notable releases." The company's plans to secure a $2 billion partnership also fell through, causing the company to revise its forecasts and lower its financial expectations across the board.

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